Capital Market And Accounting Information

The weekly performance of IBM stock presented a contestant growth. One highlight of the falling of stock price in the 6th week in the investment period was when IBM presented the 3rd quarter financial report. The investors weren’t satisfied with the profit report which they expected to be better especially when other IT companies were doing well in the 3rd quarter. One mistake I made was that I didn’t follow closely to the financial report of the company; therefore, I missed the peak of the stock price. From this experience, I learned that financial reports and current news are important indicators of the stock price. By following closely to the current event and analyzing the financial report, investors can maximize the profit and also become more familiar to the market.

The research shows that the earnings announcements of firms within an industry can impact the share prices of other firms in the same industry. This effect has been labelled as the ‘information transfer effect’. The ‘information transfer effect’ highlights the belief that share prices react to public information emanating from various sources—including

Marketing. Because of the large number of suppliers selling similar products, apparel-retail firms must stimulate demand with attractive store layouts, colorful product offerings, and various sales promotions.

The FASB Accounting Standards Codification® is the source of authoritative generally accepted accounting principles (GAAP) recognized by the FASB to be applied to nongovernmental entities.

A great number of studies further identified several factors which particularly concerns market capitalisation, effective of stock market, etc., which explains the dynamic forces of stocks returns during the earnings announcements date in an organised manner. For instance, Atiase (1985) found that unexpected information pass on to the market by actual earnings report is inversely correlated to the company’s capitalisation. Grant (1990) observed that the market in which a company’s securities are traded often determined the behaviour of stocks return around the earnings announcements. Several other studies have aimed to organise for synchronise factors by using time series data such as intra-day and daily data. However, a fairly number of more robust studies has examined the information content of macroeconomics news releases. Elsharkawy and Garrod (1996), Pope and Inyangete (1992).

After a profit announcement was made by David Jones Ltd, it is the objective of this report to note whether there was an impact of such information on investor behaviour via the share prices of this company. To ensure that the information found was accurate, the effect of the All Ordinaries was taken into consideration and comparisons were made between David Jones and its two main competitors. After analysing the closing share prices before and after the date of the announcement, it was found that share prices reduced more than that of the general stock market and also more than that of its main competitors. This report concludes that the announcement of accounting information by

Baruch Lev and Feng Gu authors of “The End of Accounting and The Path Forward for Investors and Managers” indicate that over the past 110 years, the structure and content of financial reports has not changed, and that the role that these reports play in influencing the decisions of investors has greatly diminished. Lev and Gu make a case that non-transaction events that are not captured by the financial reports such as those disclosed through 8-k filings with the Securities and Exchange Commission (“SEC”) have a greater impact on stock prices, and thus more useful to investors. In addition, they suggest that one of reasons for the decline in usefulness of financial reports stems from the increase of estimates that has made its way into these reports (Lev and Gu 2016).

The application of AASB 108 helps in identifying the accounting policy or policies that will apply to a particular event when a certain Australian

33. Manufacturing overhead consists of: A. B. C. D. all manufacturing costs. indirect materials but not indirect labor. all manufacturing costs, except direct materials and direct labor. indirect labor but not indirect materials.

‘The Capital asset pricing model (CAPM) is a very useful model and it is used widely in the industry even though it is based on very strong assumptions. Discuss in the light of recent developments in the area.’

Accounting information can be useful in order to help predict future performance in the short and long term. It is important to note however that accounting information including accounting ratios show a company’s performance at a period in time. It is historical data. Trends can be identified by comparing data in sequential periods and future forecasts can be determined using historical data. There is no evidence or proof however, that these patterns will predict the future at a level of complete certainty. In my opinion, it would be hard to argue that decreasing profits over an extended period of time, or deteriorating liquid assets and increasing long term debt will have a

1 The system of the market is not perfect enough. For the lack of effective management of listed companies, the false accounting information disclosure, application of fair value is facing high risk. The government's intervention on the market also is relatively common, causing the price of resources often deviate from the market. Market information can't fully reflect the real

Nowadays, as our economy is facing possible everyday crises, managers undergo an increasing pressure in order to keep their company 's earnings stable. Shareholders and analysts expect companies to meet forecasted goals and not to deviate from these. Especially, reliable companies are to report positive results and shall not present any 'surprises '. Managers therefore often turn to their accounting departments for help, whose job it then is to improve the bottom line by changing the information shown in financial

The financial report as organized by the accountant is as per the accounting principles. The way the accounts manager wants the accounts to be prepared is against the reporting standards that are used in many nations. In this case, the standards ensure uniformity in the reporting framework and encourage international trade. In this case, this event is a post balance sheet event that has to be adjusted in the current financial year. It is an amount that has to be taxed in the current financial year. Taking it forward will reduce our tax liability in the current accounting period, as well as increase the tax liability in the following year.

Moreover, securities analysts play the important roles of the users and providers of information and their sources of information include public information that all analysts know and private information that is possessed by individual analysts (Barron et al., 1998). Therefore, both the improvement of the transparency of listed companies ' public information and analysts ' private information can lead to an increase of the accuracy of analysts ' forecasts. Due to the lower costs of acquisition, the public information issued by the listed companies that act as the main sources of information of securities analysts is particularly important among them (Schipper, 1991), scholars ' research also focused on the correlation between the